). Politically, the government has made significant strides toward democracy, especially characterized by the election of a leftist presidential candidate with Lula. .

             With democracy and a freer society come demands for freer, more open markets, and Brazil's economy has gradually answered these demands by privatizing its industries and implementing fiscally responsible debt-reduction policies. The first of these political issues, that of privatization, was first introduced and implemented in 1991, with the privatization of the country's steel industry (Flynn 416). The steel industry was, like the oil industry, "a touchstone of nationalist identity" (ibid.). Despite this, Brazilian leaders during the 1990s saw the economic wisdom in selling state-run companies to private corporations in many fields; President Fernando Henrique Cardoso proposed significant changes to Article 177 of the nation's constitution which would allow such sales of traditional state monopolies (Flynn 417). By the end of the 1990s, previous state monopolies, including petrochemical companies, energy and power utilities, telecommunications, and several transportation networks (railways, toll roads) had been privatized.

             Lula's government continued with these political privatizations; competition and resource allocation in the private sector are today significantly influenced by the economic liberalization which was undertaken during the 1990s. The privatization of the banking industry has created significant changes in that industry's operation and market. The large privatized banks have bough out many of the previously state-run banks, improved services and increased returns for investors as well as began to offer customized packages of financial services for customers, from insurance to pensions (Economist 2001). .

             Although this privatization has increased competition and products available in the market, it has had some drawbacks, most notably in the lay-offs of previous state employees.